The won-dollar exchange rate against the U.S. dollar closed at 1,527.1 won on the 18th, up 13.7 won from the previous trading day. Based on the stock market close, the won-dollar exchange rate has stayed above 1,500 won for 23 consecutive trading days from the 15th of last month through today, the longest stretch since the foreign exchange crisis (49 consecutive trading days).
The won-dollar exchange rate was in the low 1,520-won range in the afternoon but widened its gains into the close. It is seen as due to the possibility of a U.S. benchmark rate hike. When the United States tightens liquidity, the dollar tends to strengthen and the won-dollar rate tends to rise. The dollar index (DXY), which reflects dollar demand, rose 0.9% to 100.39 points.
The Federal Reserve (Fed) kept the benchmark interest rate unchanged at 3.5%–3.75% by a unanimous vote. However, the likelihood of a rate hike increased. The dot plot, which shows Commissioners' year-end rate expectations, indicated that 9 of the 18 Commissioners projected a rate increase. A 0.25 percentage point hike was projected by 3, a 0.5 percentage point hike by 5, and a 0.75 percentage point hike by 1.